Pensions dispute threatens UK fuel supplies

18 April 2008

A pensions dispute involving 1200 workers at a petrochemical site in Scotland is set to threaten fuel supplies to the whole of the UK.

Unite members at the Ineos plant in Grangemouth are to strike on Sunday 27th and Monday 28th April in protest at plans to close the final salary pension scheme to new entrants and reduce provision for existing scheme members.

The company's pension change proposals follow its' stripping of £40 million of assets from the employee pension scheme which had been one of the highest funded pension schemes in the whole of the UK. The company has already moved to reduce its contributions to the scheme and has made other detrimental changes for employees, including introducing financial penalties for early retirement. These changes were made against the wishes of the pension scheme members during the six month consultation.

97% of Unite members at the Grangemouth plant voted to strike to protect their final salary pension scheme. The UK's entire oil and petrol supply depends on the Grangemouth site staying at full production. Unite has warned that a two day strike at the plant will shut the North Sea and effectively stop production at the plant for up to a month. This will have an immediate impact on all fuel supplies, including aviation fuel, across the whole of the UK.

Unite say the company has no grounds for closing the pension scheme which, despite a massive reduction in company contributions and the company's stripping of £40 million in pension assets, is in surplus by 11%. When Ineos bought the site from BP in 2005 the pension scheme was funded to 115% and is now funded to 120%.

Unite Joint National Officer for the petrochemicals industry, Phil McNulty, said: "We are outraged by the company's plans to close the Ineos workers final salary pension scheme when it has taken £40 million from the scheme and slashed its own contributions. Despite the company's actions the scheme is still highly profitable and the Grangemouth site makes £1 million every day so why should our members pay for Ineos' greed?

"The existing pension arrangement is excellent and the fact that the business is highly successful means that the Ineos pension scheme should be one of the best and the most secure in the country.

"Industrial action is never desirable but this is the only possible sanction against a company prepared to make such an audacious attack against our members."

Linda McCulloch, Unite National Officer said: "Grangemouth alone makes up to £3m profit every per day yet Ineos is proposing to make changes to its' pension scheme that will reduce our members' pension pay outs by an average £10,000 per year.

"This scheme is affordable and well funded. There are no excuses for the company's actions.

"Any blame for the disruption bound to be caused by strike action needs to be laid firmly at the company's door."

Ineos is the country's biggest privately owned chemical manufacturer. It plans to close its' final salary pension scheme to new employees and open an inferior money purchase plan.

Ineos acquired the BP Grangemouth site on the 25th of October 2005. Ineos is the biggest privately owned chemical business in the UK and the fourth largest in the world with a turnover of £45 billion per year.

Notes for editors

1. The owner of the Ineos Group, Jim Ratcliffe was ranked 45th in the Times 2007 Rich List and is estimated to be worth £1.1 bn.                   

2. The combined Ineos and Innovene operations, both owned by Jim Ratcliffe, made more than £414m profits in 2005. The net assets of the combined group stand at about £6.5 billion. Ratcliffe also has a £100m stake in the separate Ineos Chlor operation.

3. The pension scheme requires only £16 million a year funding by the company.